When the Forest Hills Local Schools paid Doug Evans $2.15 million for property to use as a bus hub, it came with four acres of land, five buildings – and a legal dispute between the businessman facing federal fraud charges and a tenant who wouldn’t leave.

The board of education already was under fire by some for agreeing in June to pay B.E.E. Holdings Limited Partnership, a group of which Evans is president, more than twice the market value set by the Hamilton County auditor for the property at 3652 Round Bottom Road in Newtown and nearly three times what B.E.E. Holdings paid for it in March.

Then, Forest Hills found itself running up legal fees representing itself in a Hamilton County Common Pleas Court case where Revolution Fitness, the tenant at the property, is accusing B.E.E. Holdings of a laundry list of claims unrelated to Evans’ federal case, including unjust enrichment, fraud and breach of a 10-year contract signed in 2014.

“Should a first right of refusal been offered to the company, the partners would have purchased the property as per the terms of the lease,” Mary Beth Knight, president of Revolution Fitness, said.

B.E.E. Holdings and Forest Hills wanted the fitness center out, saying it owes tens of thousands of dollars in back rent and unpaid utilities.

A trial is scheduled in June 2019.

But lawyers for Revolution Fitness and Forest Hills have negotiated an agreement, just approved by Hamilton County Common Pleas Court Judge Curt Hartman, in which Revolution Fitness has dropped its court claims against the school district and agreed to leave Round Bottom Road by Nov. 30.

Forest Hills was already using the back of the property to park buses as Revolution Fitness operates out of the office and gymnasium building in front.

The court case continues with B.E.E. Holdings and Revolution Fitness as parties.

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An Evans Landscaping truck brings up the rear of a line of Forest Hills Local School District buses traveling down Round Bottom Road in Newtown Nov. 1, 2018.(Photo: Jeanne Houck/The Enquirer)

A shared history

Forest Hills has a history of doing business with companies associated with Evans – including with what is probably his most prominent, Evans Landscaping at 3700 Round Bottom Road in Newtown – for services such as landscaping and storage.

The relationship appeared to be briefly threatened in June 2017, when an indictment was unsealed in U.S. District Court in Cincinnati accusing Evans, Evans Landscaping and company Vice President of Operations Jim Bailey of creating a fake company to land public minority construction and demolition contracts.

The defendants are to stand trial Tuesday, Nov. 13, on charges of conspiracy to commit fraud and failing to report felonies.

In an email exchange obtained by The Enquirer through an open records request, Ray Johnson, then Forest Hills’ director of business operations, wrote Evans’ attorney, Zachary Peterson, on June 9, 2017, that, “In light of the story in the Enquirer, we will need to retract our request for space. I can't put the board in a bad light and open to possible criticism.”

The email’s subject line was “Pallet Storage Lease,” a subject line that accompanied emails referencing at various times the storage of technology equipment, new furniture and school buses.

Peterson asked Johnson to reconsider the decision in an email dated June 12, 2017.

“The allegations are false. No one has been convicted of any wrongdoing and no wrongdoing has been proven,” Peterson said.

“After all, there is still a presumption of innocence in this country.”

Johnson replied within an hour that it was best to hold off for now.

“The public scrutiny could be significant if we were to park 70+ buses directly across from your offices. I can't subject our board to this possibility. While we have enjoyed a great relationship over the years, we cannot control public opinion,” Johnson said.

“I have updated our superintendent and board of education and they have affirmed their support of the decision.”

Jim Frooman, president of the Forest Hills Board of Education, said in an interview that, “If Ray sent an email, OK, but he sure as heck didn’t speak for the board of education.”

“The board of education never decided not to conduct business with Doug Evans. To the contrary, we leased property from Mr. Evans last year,” Frooman said.

The new transportation center for the Forest Hills Local Schools is on four acres of property on Round Bottom Road in Newtown. It includes this office building, pictured Nov. 1, 2018, where Revolution Fitness says it will be operating until Dec. 1.(Photo: Jeanne Houck/The Enquirer)

Bus hub a long time coming

It was on June 25 of this year that the school board voted to purchase the property at 3652 Round Bottom Road from B.E.E. Holdings.

Forest Hills, which educates children from Newtown and Anderson Township, long had wanted to move its transportation center and fleet of 77 buses from Anderson High School at 7560 Forest Road because of safety, traffic and parking concerns.

Erika Daggett, who recently left her position as associate director of communications for Forest Hills to take a position with a private company, said the $2.15 million the school board agreed to pay for the property was a fair price.

“Prior to this approval, the district thoroughly studied 13 potential sites for the district’s bus fleet; all others were deemed not feasible based on location, economics, community impact or availability,” Daggett said.

“This property is the best price of all 13 properties considered.

“In addition, it comes with many necessities needed to run a transportation center, such as fuel tanks, parking and garages, making the purchase price of this property dramatically less than the ‘all in’ price of other properties – i.e., the price after needed additions, renovations, etc.,” Daggett said.

Enter – and exit – Anderson Township

Anderson Township offered to give Forest Hills a piece of property at 6835 Kellogg Ave. for free, with conditions that included the school district paying for some public improvements.

To get the property bus hub-ready, Daggett said, the school district would have to raze a building, build a bus garage and office space, bring in a refueling station and more.

That and the concessions sought by Anderson Township would cost Forest Hills more than $5 million, Daggett said, a figure that would only get higher once the cost of insuring school buses in a floodplain was factored in.

The Forest Hills Local School District is paying for a new bus hub in Newtown with proceeds from a bond issue approved by voters in 2014. The school district's offices, seen here Nov. 1, 2018, are on Beechmont Avenue in Anderson Township.(Photo: Jeanne Houck/The Enquirer)

Where the money is coming from

Forest Hills had earmarked $3.1 million from proceeds of a $103 million bond issue approved by voters in 2014 to pay for a new transportation center.

When the school board voted to buy the property at 3652 Round Bottom Road, Frooman said the total cost of the transportation center, including improvements to be made on the property, should come in at about $2.7 million.

Money from the 2014 bond issue also was to be used to replace Wilson Elementary School on Little Dry Run Road and to make improvements at the district’s eight other schools on a staggered basis.

The work is almost done. Renovations are nearly complete at Turpin High School on Bartels Road and renovations will be complete at Anderson High School in fall 2019.

Financing raises some eyebrows

Forest Hills Board of Education member Elizabeth Barber cast the only no vote against buying the Round Bottom Road property, in part because the school district intends to finance it through a private investor.

“That’s an additional expense which is above bond-issue funds, and that’s to me above the original bond promise,” Barber said.

Frooman said then that it was too early to know whether Forest Hills would end up using money not generated by the bond issue, and that the school district’s business advisory council was onboard with the financing plan.

“Because interest rates are still quite low, what we’ve decided to do is finance this through a private investor so that we’re not using the funds that are presently available from the bond so that we can make sure we finish all the construction and then, if and when the construction is finished and the money is still available because we didn’t go over budget, then we can pay off the debt,” Frooman said.

“But if in the other case, costs go a little bit higher because of some unexpected circumstances, then we haven’t put ourselves in a really difficult position.”

Forest Hills’ road to a lawsuit

The lawsuit in which Forest Hills finds itself began when B.E.E. Holdings filed an eviction complaint against Revolution Fitness July 6 in Hamilton County Municipal Court.

B.E.E. Holdings said in court paperwork that the fitness center hadn’t paid rent since April and later said Revolution Fitness owed nearly $59,000 as of Aug. 6.

Forest Hills and B.E.E. Holdings had signed a purchase agreement for the property May 21 that was contingent upon a vote of the school board.

But Revolution Fitness decided to stay put, saying in an answer to court claims filed against it that the amended lease was signed under duress.

The Forest Hills Board of Education filed an eviction case against Revolution Fitness Aug. 15 in municipal court. It was consolidated with B.E.E. Holdings’ eviction case and, because the amount of money in contention was above the limit for municipal court cases, the consolidated lawsuit was sent to Hamilton County Common Pleas Court.

In the lawsuit, Revolution Fitness argued that Forest Hills was bound by lease terms negotiated by B.E.E. Holdings and the fitness center before the school district bought the property on Round Bottom Road.

“As claimed successor in interest to prior owner (B.E.E. Holdings), (Forest Hills) assumes not only the right and benefits of the prior owner but also accepts liabilities for breaches of said lease,” Revolution Fitness said.

The fitness center also accused Forest Hills of hurting its business by making false and slanderous statements to its clients.

Forest Hills denied that and said the claims being made by Revolution Fitness were designed to bog down the proceedings and to allow Revolution Fitness to remain on Round Bottom Road.

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Forest Hills Local School District buses, seen here Nov. 1, 2018, pull out of the school district's new transportation center at 3652 Round Bottom Road in Newtown.(Photo: Jeanne Houck/The Enquirer)

A property in flux

Hamilton County auditor records show that the property at 3652 Round Bottom Road has changed hands multiple times in the past two years.

B.E.E. Holdings Limited Partnership bought the property for $550,000 in 2010 and transferred it to Banshee 3652 LLC in 2016.

Ohio Secretary of State records show Banshee 3652 LLC was formed in 2015 and lists Peterson as its authorized representative, but no officers or partners.

On March 15 of this year, Banshee 3652 LLC sold the property at Round Bottom Road back to B.E.E. Holdings for $725,000.

Two weeks later, B.E.E. Holdings asked the Hamilton County Board of Revision to reduce the $1,053,200 market value of the property set by the auditor last year to the $725,000 sum for which the partnership bought it.

Had B.E.E Holdings been successful, its taxes — and the amount of money Forest Hills was to pocket from them – would have been reduced.

The partnership withdrew the request after, according to a representative of the Board of Revision, Forest Hills asked the board May 11 to keep the market value at the $1 million-plus auditor’s sum.

The sale of the property is listed as July 25 on the auditor’s website, where market value is defined as the most probable sale price in an open and competitive market with a willing buyer and seller.

Fair market value, which is basically whatever sale price a buyer and seller agree upon, is traditionally higher than an auditor’s computation, although B.E.E. Holdings put the fair market value of the Round Bottom Road property at $725,000 in paperwork filed with the Board of Revision in an apparent bid to reduce taxes.

Defending the sale price

“B.E.E. Holdings did submit – but then retracted – paperwork with the Board of Revision assigning the fair market value for tax purposes only at $725,000,” Peterson said.

“Comparing fair market value with tax value is akin to comparing apples and oranges. Doing so in this context, particularly because Evans retracted its submission, would be misleading at best,” Peterson said.

“Evans initially asked the district to pay $2.9 million for the property, if that helps to put the property’s value in context.”

Frooman said the Forest Hills school board, which is considering asking voters to approve an operating levy in 2019, did not pay more than fair market value for the property.

“I think the property is very much worth the price we’re paying for it,” Frooman said.

Peterson said giving Forest Hills a fair deal is important to Evans, who, along with Evans’ father and children, is a product of the school district.

“Mr. Evans has quietly donated lots to the district over the years,” Peterson said.

In turn, Peterson said, Evans is entitled to a fair shake from Forest Hills and the public, despite the federal charges pending against him.

“After all, there is a constitutional presumption of innocence in this country. Mr. Evans is not guilty of anything but trying to help a friend and trusting those who advised him,” Peterson said.

Is it over?

Knight said Revolution Fitness will reluctantly leave 3652 Round Bottom Road by Nov. 30 for another location that she will reveal when things are finalized.

“It is not something that we are happy about, but for now the property has been sold to (Forest Hills), and they have the right to terminate the 10-year lease that began in October 2014,” Knight said.

“We know it to be true that we were treated wrongfully on many occasions by numerous parties involved, and although the current lawsuit against (Forest Hills) has been settled, we will move forward in seeking damages from all parties who failed to uphold their obligations.”

Knight declined to be specific.

Peterson was more direct, saying B.E.E. Holdings will continue to pursue monetary claims against Revolution Fitness, Knight and her ex-husband.